The pulmonary vasculature is a target for inflammation and thrombosis in conditions including acute lung injury (ALI), ischemia/reperfusions (I/R) and sepsis. The endothelial cell (EC) transmembrane glycoprotein, thrombomodulin (TM), controls these processes directly and via binding and redirecting the activities of thrombin, from fibrin formation and its pro-inflammatory ability to activate vascular cells, to activate protein C (APC) that inhibits coagulation and inflammation. Loss of TM in EC aggravates lung diseases. Infusions of recombinant APC and TM are helpful in treatment of some forms of ALI, but these drugs are rapidly eliminated, do not anchor onto the EC lumen, lack interaction with EC partners such as Endothelial Protein C Receptor (EPCR), and predispose to bleeding. We posit that anchoring TM on EC will provide more specific, comprehensive, efficient and safe effects and may be used to design advanced targeted therapeutic interventions. We fused a single-chain variable fragment (scFv) of Cell Adhesion Molecule PECAM-1 antibody with active recombinant TM or its domains (scFv/TM). In pilot studies, scFv/TM, but not TM, bound to the pulmonary EC and protected from thrombosis, inflammation and edema in mouse models of lung I/R and LPS/hyperoxia, without bleeding. In this grant application we will define mechanism(s) of effects of scFv/TM and its proposed mutated iterations that specifically target selected vascular areas and pathological pathways, in order to initiate translation of this promising novel therapeutic strategy into the clinical domain. We will pursue the following specific aims: Aim 1: Assess benefit/risk ratio of scFv/TM therapy of LPS/hyperoxia injury; Aim 2: Refine scFv/TM variants with precisely controlled selective activities; Aim 3: Define scFv/TM-EPCR cooperativity. This study will uncover molecular mechanisms of scFv/TM functions and guide design of targeted TM therapeutics tailored for selective treatment of inflammation or/and thrombosis in acute pulmonary and, likely, other diseases.